City receives eleventh hour offer for Majestic site
An offer of $ 2,170,000 for the site of the Majestic hotel was made on Monday, less than 36 hours before the Hot Springs board of directors met tonight to consider an offer of $ 2,163,128 to purchase. the property and redevelop it for outdoor entertainment.
City Manager Bill Burrough said the offer from VIPA Hospitality Management came shortly after he and Mayor Pat McCabe concluded a conference call Monday morning with RA President / CEO Rick Wilson and President / CEO of the Walton Arts Center Peter Lane. RA Wilson’s $ 2.16 million offer is on the city council’s agenda tonight.
VIPA’s offer was delivered to town hall on Monday, but Burrough said the company had indicated in an email it received on Sunday night that it would make an offer.
The real estate contract that the board will review tonight states that RA Wilson will purchase the property for the sole purpose of building and developing an outdoor entertainment venue. The company must provide a memorandum of understanding with the site operator before the sale closes, according to the contract.
The Walton Arts Center, which operates the Walmart Arkansas Music Pavilion in Rogers, is in talks with RA Wilson to operate the 6,000-seat venue it is offering for the city’s 5 acres on Park Avenue.
The city did not receive a formal offer from VIPA until Monday, but Dr Vijay Patel, chairman of the board and chairman of VIPA, said the city was aware of his company’s interest in the property. for over two years. An email he sent to Burrough in August 2019 indicated VIPA’s interest in purchasing the property at the value set by the Garland County Appraiser’s Office Contract Appraisal Company.
The $ 2.17 million offer is part of the Falling Water Resort at the Majestic VIPA concept showcased in public planning sessions in April 2019. A VIPA affiliate acquired the Medical Arts building earlier this year. Parth Patel, president of development of VIPA and son of Dr Patel, told The Sentinel-Record that he plans to build a Marriott Aloft-branded hotel in the 16-story Art Deco building.
“I made the offer to purchase long before, in August 2019,” said Dr. Patel, whose company has developed or acquired more than a half-dozen hotels in the Hot Springs area, including including Home2Suites by Hilton Hot Springs on Lake Hamilton, said. “I was in the game long before the amphitheater guys were in the game. My offer was not even accepted. No response from the city manager, city mayor or city council.
“All I want is some recognition that I would like to buy it the way everyone wants to buy it. It’s public land. I have assets in Hot Springs. I’m interested in our state. I have a vision of what to do, which has been presented publicly. “
Burrough said Monday that Dr Patel’s August 2019 email came at a time when the city was weighing the feasibility of ideas presented in public planning sessions that the University’s Fay Jones School of Architecture from Arkansas facilitated at the Hot Springs Convention Center in April 2019.
“At that time, we weren’t in the market to sell the property,” he said. “We potentially wanted some type of long-term lease, but we didn’t know what the market would hold for this site. We heard some great ideas (in public planning sessions), which ranged from a hot air balloon ride to a resort hotel. “
VIPA did not respond to two tenders the city issued last year. Grand Point Investment Group and Cienda Partners’ bid for a $ 110 million spa resort was the only proposal the city said complied with its two solicitations. The Dallas-based group and DHM Design of Colorado, which offered to design a spa pool complex for which the city is expected to find investors, were the only respondents to both tenders.
The board moved away from the Grand Point and Cienda proposal in March after questioning the Dallas group’s means to execute their ambitious proposal. RA Wilson went public the following month.
“With all due respect to Mr Patel, they did not submit a project in any of these proposals,” Burrough said, referring to the two tenders. “There were no proposals to consider. Here we are today in negotiations with RA Wilson, and we receive another offer that I would consider to be at the last minute.
“I think as a board they have to consider what is in front of them today before they can consider another offer. My recommendation is that they go ahead with the decision that they are going. take with Mr. Wilson before accepting any other offer. “
Dr Patel said now was not a good time for VIPA to submit a proposal. Lenders were reluctant to fund hospitality projects during the economic uncertainty brought on by the pandemic, he said, explaining that many hoteliers defaulted on their loans as occupancy rates plummeted in response changing consumption habits and public health guidelines restricting travel.
Les Patels said they asked the city in March of last year to postpone the bidding process for a year.
“It would have been impossible to get funding last year,” said Dr Patel. “No bank was prepared to finance a penny for anything to do with tourism.”
He said his offer should be considered, even though it was postponed on the eve of tonight’s board meeting.
“Now is not the time that I wanted to submit it at the last minute, but it was the last day,” said Dr Patel. “If I didn’t act, it would be done forever. I wanted to at least have a chance to buy the land before the city actually sells it. The city should be respectful to consider my offer and give me a chance. I was here and found out that the city is coming together (today). This is the only day I could act, so I chose to submit the offer. “
Wilson questioned the schedule, noting that the contract the city received on Monday did not stipulate what would be built on the site.
“I think the timing of the offer is very suspect,” he said. “Mr. Patel had plenty of time to develop his hotel plan, which includes parking, traffic, mobility, daytime traffic and disruptions, and submit it to the city with his offer, but chose not to not doing so or providing any of this supporting detail suggests that this is nothing more than an obstacle to some personal growth.
“It is very skeptical for this to gain any credibility after the details and planning that our professional team has created and provided to the city council, and the monitoring that the council has carried out, is very skeptical. I think the council will achieve the same, that it’s unrealistic. “
VIPA’s intention to build two high-end hotels close to each other should be viewed with skepticism, Wilson said.
“How does it make sense to build two high-end hotels within a block of each other?” ” he said. “Now they’re going to build a high-end hotel at the Majestic. It would be like I decide to buy the Arlington Hotel, tear it down and build a second amphitheater.”
Burrough said he would recommend that the board weigh Wilson’s offer before considering subsequent offers.
“I have a lot of respect for Vijay and Parth Patel, and I really appreciate what they are doing in our community and their recent purchase of the Medical Arts building,” he said. “It’s nice to know that they have better things to do in the town of Hot Springs.”